Tradies in short supply as reno boom bites

A surge in home improvement activity means it’s hard to get people to do the work, finds Miriam Bell.

Tried to get a tradesperson recently? If you have managed it, count yourself lucky as those working in the trades are in high demand.

Stories are rife of people trying to engage a tradie and being told there will be waits of a year or more. Builders, painters, tilers and electricians are all flat out and booked up for months.

The reason is a significant surge in renovation and home improvement activity, postlockdown.

Independent economist Tony Alexander has been running a monthly spending plans survey since June. Intentions to spend on home renovations have been running high.

In the December survey, there was an overall rise in spending intentions to a net 44 per cent from 37 per cent in November. While plans for spending on domestic travel were highest, plans to spend on home renovations and gardening were close behind.

Intentions of spending on home renovations came in at a net 33 per cent in December, which was slightly down from a net 36 per cent positive in November.

Alexander’s survey is not the only data to highlight this trend. Online tradie job site Builderscrack has seen a lift of about 30 per cent in the total number of job posts put on its platform in the OctoberNovember period, compared to the same time last year.

Additionally, the number of jobs posted that did not attract any tradie interest in a short period of time had lifted from one in 20 in October-November last year to one in 10 this year. This suggests that demand is beginning to outstrip supply.

Builderscrack spokesman Jeremy Gray says a major reason for the boom is a redirection of money that would have been spent on overseas travel.

‘‘Pre-Covid, New Zealanders spent about $10 billion a year on overseas travel. While domestic tourism might have gone up, less than 50 per cent of New Zealanders’ overseas travel budget is being spent on domestic travel. That leaves a lot of money to spend on other stuff – like renovation work.’’

Another reason is the current heat of the housing market. There is a close relationship between house prices and trade demand, he says because when prices are tight and rising, people are likely to make compromises on what they are looking for when buying.

They get tradies to carry out work to get the property in line with what they want or they opt not to buy and instead carry out extensive renovations.

Gray says the demand is for home improvement work, such as adding on a deck, putting in a new bathroom or kitchen, or landscaping.

‘‘It’s about smaller projects that improve the quality of living. Interestingly, we are not seeing a corresponding acute rise in tradie costs at this point. The rates don’t seem to have jumped yet despite the demand. It’s just the tradies are becoming more scarce and the pipelines are getting blocked. The work will get done, it will just take longer to get to it.’’

Adding to the problem is the fact that tradies are now seeing material supply issues due to freight delays holding things up. The high demand for building products stretches the supply lines even further, which is also contributing to delays on projects, he adds.

According to Alexander, the home improvement growth is a worldwide trend.

But, in New Zealand because of a lack of investment in developing skills to support the construction industry, there is a labour shortage and the industry was already struggling to meet demand, he says. That means those looking to get renovation work done will be waiting a while to get what they want – and then, potentially, paying more for it.

‘‘There’s a broader economic impact to this though. If the government goes ahead with all of the shovel-ready infrastructure projects it plans, there will be far fewer tradies and construction workers available for renovation work and, more importantly, for building new homes.’’

The impact on new building activity is heightened because when construction booms, many tradies set up their own businesses. They tend to go for home improvement work because the projects are easier and the margins are higher.

Alexander says this situation creates a stark choice for the government: does it forge ahead with those big, artificial stimulus infrastructure projects or does it try to build more new houses?

‘‘The risk is that the construction industry will not be able to cope or supply enough people for all of this demand. That’s likely to limit the proportion of new builds that will be done over the next five years. They should remain at a high level but the rate of increase in them will slow.

‘‘Given the current housing shortage, that’s a major issue – especially as supply shortages exert upward pressure on house prices.’’

Rental properties are being affected, too. NZ Property Investors Federation president Andrew King says the high demand for tradies means landlords wanting to ensure their properties meet the requirements of the healthy homes standards may be finding that difficult.

All private rental properties must comply with the new standards within 90 days of any new or renewed tenancy from July 1, 2021.

‘‘If you wait you may not be able to get the work done in time. That could be a problem – and the result could depend on the understanding of your tenants or even the leniency of the Tenancy Tribunal, as there can be hefty fines if the requirements are not met.’’

His advice to rental property owners is to be proactive and get in the queue. ‘‘Just get something organised in terms of tradies and materials. They might say it will take a few months, but book it in because if you wait you risk missing the deadline.’’

For homeowners, the advice is much the same. Gray says those who want a tradie have to be prepared to wait.

‘‘Remember that tradies are always cycling through their work pipeline and many tradies will soon be finishing up a series of jobs that will free up their pipeline. So even if you can’t get a job done right away, put the arrangements in place for the future. Work is being picked up, it just takes longer.’’

‘‘The risk is that the construction industry will not be able to cope or supply enough people for all of this demand.’’ Tony Alexander, above